Repaying student loans - rates

OldBeanz

OK, I am an old bod and usually hanging about the Pension pages so do bear with me as I want to help sort out my son.
He first went to Uni in 2010 for 3 years and had a loan then did a MSc directly after that. This year he is going to do a teaching course PGCE and is due a bursary and loan for that.
When he starts teaching he will be living at home so will be able to save and squirrel some money into his pension and save for a house.
I assume he will have to start repaying on anything over £17k and presumably if he made large enough contributions from his salary he would be able to defer making any payments?

Ed-1

OldBeanz wrote: »

OK, I am an old bod and usually hanging about the Pension pages so do bear with me as I want to help sort out my son.
He first went to Uni in 2010 for 3 years and had a loan then did a MSc directly after that. This year he is going to do a teaching course PGCE and is due a bursary and loan for that.
When he starts teaching he will be living at home so will be able to save and squirrel some money into his pension and save for a house.
I assume he will have to start repaying on anything over £17k and presumably if he made large enough contributions from his salary he would be able to defer making any payments?

His repayment threshold goes up every April with inflation so will be £17,775 from April 2017. His PGCE loan will enter repayment in April 2018 if he graduates from his PGCE in Summer 2017.

His PGCE loan will be on repayment plan 2 as it is a post-2012 student loan (i.e. a loan for a course starting post-2012). The repayment threshold for plan 2 is £21,000 and this has been frozen until at least April 2021.

The current rules are that anything from income above the plan 1 threshold (£17,775 from April 2017) up to £21,000 repays his plan 1 loan and anything above £21,000 repays his plan 2 loan. The plan 1 loan is written off 25 years after it enters repayment and the plan 2 loan is written off 30 years after it enters repayment.

The odds are that inflation over the next few years will raise the plan 1 threshold up to the same level as the frozen plan 2 threshold (£21,000). It's not currently been decided what happens after that but the likelihood is that they would then become the same threshold and repayments would probably go towards the plan 2 loan first (as it has higher interest).

Repayments are deducted by employers directly through payroll based on gross income (before tax but after salary sacrifice etc.) - i.e. national insurance contribution-able income.

OldBeanz

Thanks for that it saved a lot of reading. I know that in the Civil Service that some contributions were set against salary but NI or any Defind Benefit pensions were not affected. I now need to work out how a teacher's pay can be downgraded.